Operating costs for vehicles used in the course of a taxpayers business are deductible. Thus, when taxpayers use their vehicles in their business or employment, they can deduct that portion of the cost of operating their vehicle. Such costs that can be deducted are property taxes that are paid on their vehicle if deductions are itemized on Schedule A. This mini-course reviews the apportionment of personal and business use, the actual cost method, the standard mileage method, and expensing. Moreover, this presentation informs practitioners about topics such as the benefits and costs of leasing versus owning and working condition fringe benefits. ASSIGNMENT
At the start of the materials, participants should identify the following topics for study:
* Apportionment of personal & business use
* Deduction limitations using the actual cost method
* Expensing – 179
* Predominate business use rule
* Auto leasing
* Standard mileage method
* Auto trade-in vs. sale
* Employer-provided automobile
* Nonpersonal use vehicle
* Reporting of an employer-provided automobile
Learning Objectives
After reading the materials, participants will be able to:
1. Recognize tax vehicle depreciation (168) and expensing (179) methods including their requirements and limitations under MACRS and recognize basis, business use, and deduction computations.
2. Specify the predominate business use rule recognizing the result of less than 50% qualified business use, cite the pros and cons of auto leasing, and determine how to estimate monthly lease payments indicating what factors affect payments so clients may recognize leasing costs and know common leasing terms.
3. Identify items included under the standard mileage method listing items that may be separately deducted, determine the taxable fringe benefit value of an employer-provided automobile using the general and special valuation methods and specify several qualified nonpersonal use vehicles stating what reporting standards apply.
